A decrease planned for Atwater’s Mello-Roos taxes

rgiwargis@mercedsunstar.comOctober 29, 2013 

— Taxpayers living in the city’s Mello-Roos district will experience some relief when they look at their next few tax bills.

City officials gave an update on the city’s Community Facilities District – also known as Mello-Roos – during a City Council meeting Monday night. According to the presentation, taxpayers will see a reduction of 16.3percent in Mello-Roos taxes for the 2013-14 year and another significant decrease in 2014-15.

This is the first decrease to taxpayers in the district since its formation in 1990, according to Community Development Director Scott McBride.

McBride shared more good news Monday: the Mello-Roos taxes are on target to expire in August 2015, as scheduled. Residents will see the final collection on their October or February 2014 tax bill.

“I just think it’s important for people to know the date is not changing,” McBride said. “The last bond payment will be in August 2015, and the condition of the district is in good shape at this point.”

The city paid about $1.8million each year to pay off the bonds, McBride said, and doesn’t anticipate extending the Mello-Roos taxes beyond 2015. The district includes 1,183 taxed parcels, the majority of them residential properties.

Atwater residents in the district sounded off on the Merced Sun-Star’s Facebook page Tuesday about the Mello-Roos taxes coming to an end, sharing their relief and excitement.

“Very happy the extra tax will be gone,” said Kellie Crawford Valencia. “What a relief to so many of us in the area who are paying the bill.”

Andrea Wilson echoed that sentiment, saying she is “looking forward” to the taxes ending and that it would be nice to have the extra money.

McBride said the decrease in homeowners’ payments comes from $400,000 in special assessments and a $150,000 deed of trust – both from two large properties acquired by the city. The money will be applied toward the total debt, which stands at about $3.8million.

The district also has $660,000 in fund reserves that will be applied toward the debt in 2014-15, McBride said. As a result, taxpayers could see another “significant” reduction in payments that year.

Atwater Mayor Joan Faul commended Mello-Roos taxpayers Monday for doing their part to help the city pay off the bonds.

“I think this is a historic event if we could get this Mello-Roos taken care of by 2015,” Faul said during the meeting. “I just want to thank the residents out there because they’ve done their job.”

Atwater’s Mello-Roos district was formed in 1990 when the area was made up of undeveloped land, according to McBride. About $17.75million in bonds were issued, which paid for street improvements, water and sewer extensions, and underground utility extensions such as electricity and phone service.

Since then, Mello-Roos taxes have been increased about 2percent each year, he said.

The Mello-Roos taxes were the subject of controversy for the city of Atwater through the years. Non-payment of taxes, the economic recession and closure of Castle Air Force Base in 1994 all threatened to put the district in default.

Some residents claimed they weren’t aware of Mello-Roos taxes – which can range from $1,647 to $2,256 for single family homes – when purchasing their homes, possibly leading to a number of foreclosures.

Other Merced County residents said the Mello-Roos taxes discouraged them from purchasing a home in Atwater.

“Once I found out that a home for sale was in a Mello-Roos area, I wouldn’t even consider looking at it,” Eileen Elrod said in response to a question posted on the Sun-Star’s Facebook page.

Janine Xavier Vieira said the Mello-Roos taxes were the first thing that drove her away when house hunting 10 years ago in Atwater.

Doug Libecki agreed. “It affected where I looked for a home as well,” he said.

Sun-Star staff writer Ramona Giwargis can be reached at (209)385-2477 or rgiwargis@mercedsunstar.com.

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